Film grain noise in motion pictures is caused by the developing process of silver-halide crystals dispersed in photographic emulsion. Due to the natural physical process, it is unavoidable in the analog film. When we digitize and compress movie contents by scanning the analog film, such randomly distributed film grain noise is a major burden for typical video coding systems due to its high entropy. Since film grain noise has a relatively larger energy level in the high frequency band, the block-based encoder in the current video coding standards is not efficient even in the DCT domain. Current encoders also suffer from inaccurate motion estimation.